$700M in Tax Credits Sold as Part of Louisiana’s Solar Panel Factory Project

$700M in Tax Credits Sold as Part of Louisiana's Solar Panel Factory Project

In a groundbreaking move, First Solar Inc., a leading American solar manufacturer, has successfully negotiated the sale of $700 million in tax credits, a first-of-its-kind transaction in the solar industry. This significant development comes under the Inflation Reduction Act (IRA) initiated by the Biden administration, highlighting the act’s effectiveness in promoting renewable energy ventures.

Last week, First Solar revealed in a press release that it had finalized two deals with Fiserv Inc., a financial technology company based in Wisconsin. These agreements involve the sale of $500 million and an additional amount up to $200 million in tax credits. Fiserv agreed to purchase the credits at 96 cents per dollar, marking a notable precedent in the solar energy sector for such transactions.

The proceeds from this sale are set to bolster First Solar’s financial position, aiding its ambitious expansion plans. The company is investing $1.1 billion in a new manufacturing facility in Louisiana, alongside other projects in Alabama and Ohio. This expansion is part of First Solar’s strategy to increase its production capacity and market presence.

These tax credits were earned by First Solar through the sale of its photovoltaic solar modules, which were manufactured in 2023 using domestic components in its Ohio and California factories. The credits are a direct result of the company’s commitment to using locally sourced materials and supporting American manufacturing.

The deal was finalized shortly after the U.S. Department of Treasury and the Internal Revenue Service outlined proposed rules for implementing the 2023 Advanced Manufacturing Production tax credits under the IRA. This timing underscores the act’s role in fostering industrial growth and sustainable energy practices.

Mark Widmar, CEO of First Solar, expressed his enthusiasm about the deal. He emphasized that the IRA is fulfilling its purpose by incentivizing domestic manufacturing. According to Widmar, this liquidity injection enables manufacturers to reinvest in innovation and expansion. He also highlighted the significance of this agreement for the solar industry, establishing a valuable precedent for the marketability and utility of Advanced Manufacturing Production tax credits.

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